Chuck Schumer, Senate Democrats flub statistic on layoffs in 2018

Senate Minority Leader Chuck Schumer, D-N.Y., speaks to reporters before House and Senate tax bill conferees met to work on the sweeping overhaul of the nation's tax laws on Dec. 13, 2017. (AP/J. Scott Applewhite)

As Americans rushed to file their taxes, the Democrats in the U.S. Senate produced a news release on April 16 that criticized the Republican-backed tax bill that President Donald Trump signed into law late last year.

The document began, "As millions of Americans finish preparing their taxes, corporate executives are laughing all the way to the bank thanks to the Republican tax bill," the document said.

Executives, the release continued, are "laying off American workers – in fact, more than 100,000 American workers have already been laid off in 2018."

This statistic is wrong in two ways.

The office of Senate Minority Leader Charles Schumer, D-N.Y., told us the 100,000-person count was based on public reporting of layoffs and was not intended to be comprehensive.

However, there is a comprehensive number published every month by the Bureau of Labor Statistics. In January 2018, there were 1,784,000 layoffs, and in February, there were 1,647,000. That’s more than 3.4 million layoffs in those two months alone — or 34 times the number cited in the Democratic document.

"Each quarter, millions of Americans are laid off, millions more quit, and millions are hired," said Jed Kolko, the chief economist for Indeed.com. "Even when the net growth in employment each month is only in the range of 100,000 to 200,000, that's the result of far more hires, quits, and layoffs, as people change jobs or enter and leave employment."

Another problem: the implication that the recent tax law has made things worse.

In reality, the number of layoffs has varied within a narrow band since the recovery from the Great Recession took hold.

According to BLS data, the number of layoffs has bounced around since mid 2010 in a narrow range, between 1.5 million to 1.9 million per month. So there isn’t a significant change in the current pace of layoffs.

Here’s a chart showing the number of layoffs in every month since December 2000:

Kolko noted that a better statistic is actually the layoff rate, which is layoffs divided by the total number of people employed. This takes into account the number of employed Americans, which generally rises over time.

The chart shows an even stronger pattern: Since the end of the Great Recession, the layoff rate has been declining, under both Trump and his predecessor, President Barack Obama.

Kolko added that nearly twice as many workers today are quitting as are getting laid off, "reflecting the confidence many workers have that they'll be able to find another job in today's labor market." The quits-to-layoffs ratio today is near its highest level since 2001, he said.

Schumer’s office disputed that they were trying to imply that layoffs had accelerated significantly as a result of the tax bill. Rather, they said the point was that that the bill hasn’t lived up to the rosy promises made by Republicans who supported the tax bill, from Trump to House Speaker Paul Ryan, R-Wis., to Senate Majority Leader Mitch McConnell, R-Ky.

Even so, the available data only covers the first two months after the tax bill was signed, calling into question how large an impact it could have had on preventing layoffs.

Our ruling

Schumer and the Senate Democrats said that in the wake of the Republican-backed tax bill, "more than 100,000 American workers have already been laid off in 2018."

The number of layoffs in that period was actually 34 times higher than the number cited — and the layoff rate has actually been declining consistently for the past eight years.

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